The country’s largest lender State Bank of India (SBI) Saturday reported a 74 per cent jump in its standalone profit after tax at Rs 13,265 crore in the quarter ended September 2022 as compared to Rs 7,627 crore in the year-ago quarter.
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This was the highest-ever quarterly net profit posted by the lender, on the back of healthy net interest income (NII) growth and fall in bad loan provisioning.
Net interest income, which is the difference between the interest earned and interest expended, rose by 12.83 per cent to Rs 35,183 crore from Rs 31,184 crore last year. This growth was led by an improvement in credit off take in all the segments and strong asset quality, the bank’s Chairman Dinesh Khara told reporters.
Domestic net interest margin (NIM) improved 5 basis points (bps) to 3.55 per cent.
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On the asset quality front, gross non performing assets (GNPA) ratio during the July-September 2022 quarter improved to 3.52 per cent from 4.9 per cent. Net NPAs eased to 0.8 per cent from 1.52 per cent.
The improvement in asset quality got reflected in the bank’s credit cost which fell to 0.28 per cent from 0.43 per cent.
Fresh slippages in the quarter stood at Rs 2,399 crore compared to Rs 4,176 crore in the second quarter of FY22.
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Loan loss provisions fell by 25.5 per cent to Rs 2,011 crore
from Rs 2,699 crore in the year-ago quarter.
The bank saw a healthy credit growth of 19.9 per cent, with corporate loans increasing by 21.18 per cent and retail by 18.84 per cent. Khara expects credit growth of 14-16 per cent in the current financial year.
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“There is an improvement in capacity utilisation and the kind of demand we have seen on the ground gives us the confidence.,” he said. The capital adequacy ratio (CAR) stood at 13.51 per cent compared to 13.35 per cent.
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Khara said the bank continues to remain very well capitalised and the internal accruals will be more than enough for it to take care of the normal business growth requirements.
Speaking on international trade settlement in rupee, its managing director (international banking, global markets and technology) C S Setty said the lender has reached out to its 250 corresponding banks for tie-ups but, so far, no special Vostro account has been opened.
“There are several banks that have come back to us for tie ups. We require the regulator’s approval here and they also require approval from their regulators. It’s all in the process,” Setty said, adding that the lender is very seriously pursuing it.
On July 12, the RBI had put in place a mechanism to settle international trade in rupees “in order to promote growth of global trade with emphasis on exports from India and to support the increasing interest of the global trading community in the rupee”.
